Page 132 - P6 Slide Taxation - Lecture Day 5 - VAT Part 1

Solution

Output tax:

Step 1: R159 600 × 100/115 = R138 783

Step 2: R138 783 × 0,3% = R416

Step 3: R420 – R85 = R331

Step 4: R335 × 15/115 = R43,22

Step 5: R43,22 × 100% = R43,22 output tax payable

If the vehicle had not been a motor car but a delivery vehicle, the
employer would have been able to claim the VAT paid on the vehicle as

an input tax credit (R159 600 × 15/115 = R20 817), and output tax

would have been calculated as follows:

Step 1: R159 600 × 100/115 = R138 783

Step 2: R138 783 × 0,6% = R833

Step 3: R833 – R85 = R748

Step 4: R748× 15/115 = R97,57

Step 5: R97,57 × 100% = R97,57 output tax payable